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November 2015

Daily Currency Insight

Published: Friday 20 November 2015

  • UK retail sales cause GBP pause
  • Rand strengthens after SARB rate hike
  • Canadian inflation likely static
Sterling paused but didn’t really step too far back after retail sales data showed a slowdown in October. The surge in September due to the Rugby World cup was always going to distort the numbers, so I guess traders were ready for the news but high street businesses must be concerned as we head into the all-important Christmas binge. Today’s release of Government borrowing data will possibly boost the Pound further because many analysts think the debt level will come down a tad. We are talking about teaspoon and ocean comparisons though.
 
The European Central Bank minutes showed that the EC considered expanding the money supply in October. That adds weight to the argument that it is only a matter of time before we see further quantitative easing and perhaps a negative deposit rate; in effect, charging banks to leave money with the ECB overnight. The euro weakened on the news and is likely to continue to weaken in the days and perhaps months ahead. Today’s speech by ECB President Draghi may shed some light on that.
 
The South African Reserve Bank raised the SA base rate by 25 basis points yesterday; bringing it up to 6.25%. They have concerns over the pace of inflation; particularly food price inflation due to a severe drought and, although they didn’t mention it, the weakness of the South African Rand is undoubtedly raising the cost of imports. It is, however, offsetting the damage being done to SA exports due to rock bottom commodity prices and weak demand. The Rand, which had flirted with R22 to the Pound earlier in the day, gained 50 cents against the GBP before close of business.
 
Today’s data diary is a slim volume. Canadian inflation data is perhaps one of the bright spots but we expect the year on year figure to be around 2.0%; much like last month. Next week brings the Chancellor’s Autumn Statement. We’ll find out just how loud the pips are squeaking in Whitehall and get some steer on some of the expected taxation changes that are being widely discussed. We will also get revised economic growth data for the UK, US and EU. Lots to look forward to then.
 
And I’ll let you get on with your Friday after this ‘what did you think might happen’ story. Model Elizabeth Dickson took part in a stunt for Playboy magazine in which she lay on the ground, had a golf ball placed on a tee on top of her very shapely bottom and waited for Kevin Klein to play the ball. Well who’d have thought it and lawks-a-lordy, he swung a little too low and whacked her buttock with the driver. The bruise she suffered is a sight to behold. Either way, she sued Playboy and got a $500,000 payout for the injury. Nothing demeaning going on here and no stupidity on anyone’s part obviously. Have a great weekend.
 
 
SURPRISE
The doctor’s waiting room was pretty quiet as the elderly lady entered the Doctor’s surgery. A few minutes passed while people read out of date magazines and Readers Digest before the surgery door was flung open and the woman careered down the corridor shrieking at the top of her voice before disappearing into the car park. One of the practice nurses and a receptionist gave chase and caught up with the woman before she could drive away. After a few moments, the 62 year old calmed down and the nurse left her with the receptionist before storming into the Doctor’s surgery.
 
“What the hell were you thinking?” she railed at the Doctor. “Mrs Jones is 62; she has three children, 5 grandchildren and has already been through the menopause. What are you doing telling her she’s pregnant? She nearly had a heart attack!”
 
“Yes yes, that’s all very well,” said the Doctor, “but has she still got hiccups?”